Since my new Philips DVP5996k player supports HDMI output, I had to test and determine for myself if indeed HDMI upscaling to 1080p results to clearer video. From what the Link Worth projector sales man told me, my Mitsubishi home theater projector can display up to 1080i using component video. So I've always assumed that HDMI output would not be that much different if your player is not really running in Blu Ray format. After all, the scanlines produced by standard DVD discs are way below even the "regular" HD of 720p. So software interpolation to increase the number of lines to 1080p is not that big a deal.
Well, after staring at the screen for several minutes watching my downloaded Heroes Season 3 divx files, I can say that there is indeed a difference! Its not exactly as evident as moving from the world of VHS to DVD, but it is noticeable. The HDMI output is slightly much better than the component video output.
What I did was connect the Philips DVP5996k to our Samsung Series 5 LCD TV via both HDMI and component video. Then while the movie was playing, I would freeze a scene; toggle between HDMI and component video source; and try to detect the difference. I asked Cols to also make a comment without telling her what I'm experimenting on, and she also noted that the HDMI version had a bit more detail than the component video one.
I also read some time ago that HDMI only carry video signals. I guess that must have been an old spec of HDMI, as the one that came with my player already carried audio as well. At first, I didn't know what it meant when it asked me on the setup screen of Philips whether I want to enable audio on the HDMI. So I chose 'yes'. Then for some time, I couldn't figure out why the audio of the shows I was watching seem to have an echo. Later, I realized it was because the audio was being sent to the Samsung LCD TV and playing on its built-in speakers, while at the same time, the Yamaha A/V Receiver was also playing back the same audio. So the speakers at close proximity to each other caused the really weird sound effect. I disabled audio on the HDMI so that it will just pass video signals to the LCD TV and play its audio via digital coaxial cable to the Yamaha receiver and everything was good.